July 2008

The Opportunity for National Health Reform in 2009

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State Efforts Have Driven Reform Forward

Expanded coverage for children & adults

Reformed insurance markets

Improved quality and cost effectiveness

Reforms in Massachusetts, Maine, Vermont & Illinois, etc. are shaping the national landscape

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Characteristics of Successful Reform

Efforts have been incremental

Passage of reform has required:• Organized consumer activism

• “Strange bedfellows”

• Political leadership & compromise

• A “must do” moment

• Federal cooperation

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Challenges to state health reform:

Rising health care costs

State budget deficits

Balanced budget requirements

Taxing authority Cross-state competition

Need for federal support & cooperation

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Why is National Reform Important to State Advocates?

States need strong federal partnership to help finance, support and sustain Medicaid, SCHIP and other public coverage

States have limited authority over employer health plans (under ERISA guidelines)

Federal government has a greater ability to create larger risk pools and finance re-insurance

Federal government can use Medicare to drive the cost agenda and support states in cost containment approaches

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The shape of reform will depend on:

Level of Public Concern Presidential LeadershipCongressional SupportOrganized Political PressureEconomy and the Budget Deficit Pressure from States

Will National Reform Happen in 2009?How Comprehensive Will it Be?

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Level of Public Concern

Health care ranks 3rd among top issues for voters in their choice for President

Health care is also a top concern for those who list the economy as their #1 issue

5%

5%

7%

7%

9%

13%

21%

29%

43%

Education

Morality issues

Taxes

Immigration

Terrorism

Corruption/Frustration withgovernment

Health care

Iraq

Economy

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Presidential Leadership

• McCain proposes a market-based solution with less government involvement

• Health care is not a high priority to the Republican base

Significant divisions exist between health care agendas of Democrats and Republicans

• Obama has health care plan that includes expanded health coverage and greater regulation

• Health care is a high priority to the Democratic base and Independents

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Congressional Makeup

What are likely projections?

Democrats likely will increase their majorities in both the Senate and House*

• 56 D Senators (+5)• 245 D Representatives (+13)

Key leaders are committed to providing strong direction

(*Cook Report estimates)

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Organized Political Pressure

• Providers– Generally support expanded coverage – Concerned about government price controls and potential

revenue loss

• Insurers– Split on the issue of coverage for all, but some support – Concerned about competition from public coverage

• Employers– Increasingly disenchanted with status quo but divided on many

key issues (e.g. continuation of employer based system; “pay or play” requirements for employers; role of government)

– Generally interested in delivery system reform and sympathetic to increased consumer cost-sharing and more “market” mechanisms

– Small employers concerned about their ability to maintain their own coverage

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Organized Political Pressure

• Labor– Supports universal coverage– Involved in multiple coalition efforts– Many unions seeking new alliances with employers on

reform

• Consumer Organizations– Organizational and strategic divisions similar to labor – Concerned about under-insurance and high out-of-pocket

costs, as well as uninsured – Have concerns about potentially regressive financing

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Budget deficit

Recession

Pay as you go (PAYGO)

How will reform be financed?

What will it cost?

Who will pay?

Economy and the Budget Deficit

Health reform financing strategy is a critical issue

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States under financial pressure

Many states have expanded children’s coverage under Medicaid or SCHIP; federal resources still needed

Status of state health reform initiatives, e.g. Massachusetts

Governors and state legislative leadership

Providers

Consumer & coalition action

Pressure from States

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Learning from our History

Is 2009 this generation’s opportunity for reform?

1991-94 Clinton Health Plan • Never came to a vote in Congress

1962-64 Medicare/Medicaid • Enacted with an overwhelming majority

1946-49 Truman’s National Health Insurance • Never came to a vote in Congress

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How does 2009 compare to other attempts?1965 1993-1994 2009

Level of Public Concern

Enormous public support for the elderly

Strong support for the uninsured, but not as strong as in ‘65

Concern has shifted more to cost, rather than coverage

Presidential Leadership

Landslide victoryStrong commitment to reform

Plurality Strong commitment to reform

TBD

Congressional Makeup

Democrats: 68 Senate 295 House

Democrats: 57 Senate 258 House

Democrats: 56 Senate (est*) 245 House (est*)*Based on Cook Political Report

Organized Political Pressure

Strong labor supportStrong opposition from the AMAHospitals and Blue Cross neutralized

Strong opposition from insurers and PharmaLukewarm support from Labor and other progressives

Health industry supports coverage, worried about cost containmentLabor/ consumers mobilizing

Economy and the Budget Deficit

Economy strong, budget deficit not yet a major concern

Significant concern about the budget; rebounding economy

Possible recession; concern about budget (especially long term)

Pressure from States

States not a major actor in the debate

States play a more prominent role in health debate as a result of Medicaid

State fiscal conditions and role of Medicaid/SCHIP are major issues

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Four potential environments for national health reform:

#1. D President, strong D Congress (e.g. 60+ D Senators)

#2. D President, narrow D Congress

#3. R President, D Congress

#4. R President, R Congress

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Environment #1: D President, strong D Congress

Best chance for sweeping reform, similar to current Democratic presidential candidates plans

Implications for state organizing and policy: • Mobilize in support of federal reform

• Focus on state-level implementation

• Development of next policy wave (e.g. delivery system issues)

• Protect state policies that benefit consumers

Four potential environments for national health reform:

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Environment #2: D President, narrow D Congress

Strong SCHIP bill, additional reforms of Medicaid, private insurance, new opportunities for state action; or

More limited federal legislation & states pursue Medicaid waivers

Implications for state organizing and policy:

• States will be locus of significant policy change with potential to catalyze future federal reform

Four potential environments for national health reform:

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Four potential environments for national health reform:

Environment #3: R president, D Congress

Partisan divisions potentially make consensus more difficult

Implications for state organizing and policy:

• Defense of public programs during economic downturn• Promote reforms that lay the foundation for future

reform work (e.g. hospital accountability, Rx reform, insurance reform)

• Renewed focus on coverage expansions as economy improves

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Environment #4: R President, R Congress

Market-based system reform initiatives by Republicans

Implications for state organizing and policy:

• Defense of public programs

• Lay groundwork for future health reform

Four potential environments for national health reform:

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Community Catalyst’s Assumptions

Successful reform will:

Appeal to an organizable / mobilizable base

Address the concerns of the general public around both coverage and (their own) costs

Avoid unifying the health care industry in opposition

Create new opportunities for movement building and successive waves of reform

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Quality affordable health care for all through comprehensive reform: push for the best possible outcome within the limits of the political environment

We will focus on :• Building the capacity of consumers in state environments to

influence the national effort

• Facilitating participation by state advocacy groups in policy design and implementation activities and strategies

• Promoting policy that is supportive of state programs

• Working to protect vulnerable populations

Community Catalyst’s Goal for a National Reform Process

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Core Messages for State Advocates

Strong health advocacy base in states will be critical for passage, implementation, monitoring, and follow-up on reform strategies

Advocates need to seek common ground and alliances with the employer community and health industry players

Reform likely to be an ongoing process, not a one shot deal

Primary focus of action likely to shift back and forth between the state and federal level